Justia Insurance Law Opinion Summaries

An employee of High Performance Alloys, Inc. died while working at the company’s facility. The deceased employee’s estate sued the company for wrongful death, alleging gross negligence, willful and wanton conduct, disregard of safety regulations, and actual intent to cause injury. The complaint referenced prior safety violations, knowledge of hazardous conditions, failure to implement available safety measures, and a claim that the employer acted with actual intent to cause injury.The estate’s lawsuit was pending in Indiana state court. High Performance Alloys sought coverage under its Worker’s Compensation and Employers’ Liability Insurance Policy issued by Insurance Company of the West. ICW denied coverage, asserting the claims were excluded by the policy. ICW then filed a federal declaratory judgment action in the United States District Court for the Southern District of Indiana, seeking a determination that it had no duty to defend or indemnify High Performance Alloys. High Performance Alloys counterclaimed for coverage. The district court granted judgment in favor of ICW, holding that the claims were either barred by Indiana’s Workers’ Compensation Act or excluded by the Policy’s intentional acts exclusion.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s ruling de novo. The Seventh Circuit held that the estate’s allegations, even if true, either described an accidental injury governed exclusively by Indiana’s Workers’ Compensation Act or an intentional injury excluded from coverage by the policy. The court found the complaint did not allege facts sufficient to plead an intentional tort under Indiana law and denied a request to certify questions to the Indiana Supreme Court. The court affirmed the district court’s judgment, holding that Insurance Company of the West has no duty to defend High Performance Alloys in the underlying lawsuit. View "Insurance Company of the West v High Performance Alloys, Inc." on Justia Law

A driver insured by a reciprocal insurance exchange rear-ended another individual while stopped at a red light, causing injuries. The injured party, represented by counsel, made a prelitigation offer to settle her bodily injury claim against the insured driver for the “total available policy limit of $100,000, or less,” requiring acceptance in writing by a specified date and a copy of the policy declarations. The insurer responded within the deadline, accepting the offer and providing the requested documentation, confirming the policy’s bodily injury liability limit was $15,000 per person. The injured party refused to execute the settlement documents and instead pursued litigation against the insured driver.The insurer then filed a separate action against the injured party for breach of contract, declaratory relief, and specific performance, resulting in consolidation of the two cases in the Superior Court for the County of San Bernardino. The insurer moved for summary judgment or summary adjudication on its declaratory relief claim, arguing that a binding settlement agreement had been formed when it accepted the settlement offer according to its terms. The Superior Court denied this motion.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case on a petition for writ of mandate. The appellate court held that the insurer’s timely acceptance of the offer, along with provision of the policy declarations, satisfied all conditions of the injured party’s settlement demand and created a binding settlement agreement. The court rejected arguments that the settlement was contingent on an asset declaration or that subsequent events nullified the agreement. The appellate court granted the petition, directing the trial court to vacate its denial and instead grant summary adjudication for the insurer on the declaratory relief claim. The insurer was also awarded its costs. View "Farmers Ins. Exchange v. Superior Court" on Justia Law

The case centers on a dispute between an insurer and its insureds regarding coverage for alleged vandalism at a rental property. Brenda Ricci purchased the property at a foreclosure sale, obtained an insurance policy from Rhode Island Joint Reinsurance Association (RIJRA), and allowed the previous owner, David Christian, to remain as a tenant. After a rent dispute and condemnation of the property for code violations, the tenant vacated. The Riccis discovered damage, claimed it was vandalism, and submitted an insurance claim. RIJRA investigated, concluded the damage was unfinished remodeling rather than vandalism, and reserved its defenses.RIJRA filed a declaratory judgment action in the Washington County Superior Court seeking clarification of its obligations under the policy. The Riccis counterclaimed, seeking appraisal and asserting various claims. RIJRA later amended its complaint to add fraud and misrepresentation counts. The Superior Court bifurcated proceedings and stayed the counterclaims. A jury trial was held, during which the Riccis’ motions to exclude evidence and send the matter to appraisal were denied. The jury found the Riccis had not proven the alleged damage occurred during the policy period, resulting in a verdict for RIJRA. Judgment was entered in favor of RIJRA on the main claim and on all counterclaims. The Riccis’ motions for a new trial were denied.On appeal to the Supreme Court of Rhode Island, the Riccis challenged evidentiary rulings, jury instructions, denial of appraisal, admission of deposition testimony, and denial of their new trial motions. The Supreme Court affirmed the Superior Court’s judgment and its denial of the new trial motions, holding that the trial justice did not abuse her discretion or commit reversible error in any of the challenged rulings, and that the Riccis failed to prove their claim was covered under the policy. View "Rhode Island Joint Reinsurance Association v. Ricci" on Justia Law

An employee of a corporation died following a motor vehicle accident that occurred while he was acting within the course of his employment. His widow, acting individually and on behalf of his estate and their children, collected funds from her personal auto policy, the tortfeasor’s policies, and the tortfeasor directly. She then sought underinsured motorist (UIM) benefits under her late husband’s employer’s commercial auto policy, issued by an insurer, which covered a fleet of twenty-six vehicles and listed the employer, a corporation, as the Named Insured. The insurer paid $1,000,000, the per-accident UIM limit, but denied the widow’s further claim to “stack” the UIM limits for each covered vehicle, totaling $26,000,000, on the basis that stacking was only available to an “individual Named Insured.”The widow filed suit in Kent County Superior Court, seeking a declaratory judgment and alleging breach of contract and bad faith. The insurer moved for summary judgment, and the widow filed a cross-motion. The Superior Court found that there was no circumstance in which the decedent could be considered an “individual Named Insured” under the policy, granted summary judgment to the insurer, and denied the widow’s cross-motion. Final judgment entered, and the widow appealed.The Supreme Court of Rhode Island reviewed the grant of summary judgment de novo. It held that the policy unambiguously allowed stacking only for an individual Named Insured, which the decedent was not. The Court found that the insurer did not waive its defenses, the stacking benefit was not illusory, and the “Martinelli exception” did not apply. The Court also concluded that the Rhode Island statutory stacking provision for UIM coverage does not apply to employees under a commercial fleet policy where the corporation is the Named Insured. The judgment of the Superior Court was affirmed. View "Horsman v. Travelers Property Casualty Company of America" on Justia Law

Empirical Prime, LLC defaulted on a loan issued by Enterprise Bank, violating the loan agreement by obtaining additional loans from other banks. Officers of Empirical allegedly submitted inaccurate financial statements and manipulated documents to secure these loans, as well as commingled and misappropriated funds. After the default, Enterprise Bank sought the appointment of a receiver, resulting in Brent King being appointed as receiver for Empirical. King, acting as receiver, sent letters to Texas Insurance Company (TIC) asserting that Empirical was owed coverage under a Directors and Officers Liability Policy, citing losses from the officers’ alleged misconduct.The case was initiated in Missouri state court by King, alleging breach of contract and vexatious refusal to pay under Missouri law. TIC removed the action to the United States District Court for the Western District of Missouri and moved to dismiss, arguing King lacked standing and that his claims failed to meet the policy’s requirements for coverage. The district court found that King had standing but concluded he failed to sufficiently allege either a “Claim” or a “Loss” as defined by the policy, because his letters to TIC were not demands against Empirical and there was no allegation of a legal obligation to pay resulting from a claim. The court granted TIC’s motion to dismiss and denied King’s motions to alter the judgment and to file an amended complaint, finding amendment would be futile.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court’s judgment. The court held that King’s complaint did not plausibly allege a “Claim” or “Loss” triggering coverage under the policy, and that the district court did not err in denying leave to amend because the proposed amendments would not cure these deficiencies. Thus, the dismissal and denial of leave to amend were upheld. View "King v. Texas Insurance Company" on Justia Law

A senior citizen, Jerry Freid, became the insured under a $4 million life insurance policy in 2008, with the policy owned by a trust naming his daughter as beneficiary. The transaction was orchestrated by Michael Binday, whose business solicited seniors to take out life insurance policies for third-party investors through premium financing schemes. These arrangements typically ensured that neither the insured nor their estate bore financial risk, and the policies were ultimately acquired by investors after a contestability period. In Freid’s case, all premiums were financed and the trust sold the policy to an investor after two years. Evidence established that Freid lacked both the means and legitimate reason to seek such a large policy, and that the representations made in the policy application regarding his finances and intent were false.After Freid’s death in 2020, Ameritas Life Insurance Corp., successor to the original issuer, refused to pay policy benefits to Vida Longevity Fund, which had purchased the policy and was represented by Wells Fargo as securities intermediary. Wells Fargo sued in the United States District Court for the District of Nebraska, alleging breach of contract and bad faith. The district court granted summary judgment for Ameritas, finding New Jersey law applied and that the policy was void as a stranger-originated life insurance (STOLI) policy, contrary to state law. The court concluded that because the policy was void ab initio, Ameritas owed no benefits.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. It affirmed the district court’s decision, holding that New Jersey law governed the policy under Nebraska’s choice of law rules, and that the policy was void under New Jersey law as a STOLI transaction. The court determined that no genuine dispute of material fact existed and that summary judgment for Ameritas was proper. View "Wells Fargo Bank N.A. v. Ameritas Life Insurance Corp." on Justia Law

After a motor vehicle accident, an injured person received neck and shoulder treatment from a naturopathic and holistic medicine provider, specifically low level laser therapy (LLLT). The provider billed the patient’s no-fault automobile insurer for the treatment, but the insurer reimbursed only a minimal amount, recoding the claims as a different therapy and contending that LLLT was not a covered benefit. The provider asserted that state law required the insurer to fully reimburse the treatment as a personal injury protection (PIP) benefit.Following the insurer’s denial, the provider sought review through the Office of Administrative Hearings. The hearings officer initially dismissed the claim, finding insufficient evidence that LLLT was a covered PIP benefit, and the Insurance Commissioner adopted this decision. On appeal, the Circuit Court of the Third Circuit reversed, holding that dismissal without a hearing was improper, and remanded for a merits hearing. At the subsequent hearing, the provider presented evidence regarding the effectiveness of LLLT but did not establish that prepaid health care plans in Hawai‘i covered this therapy. The hearings officer again ruled for the insurer, finding the provider failed to prove the treatment was “substantially comparable” to those covered by prepaid health care plans, and the Commissioner adopted this decision. The circuit court affirmed, as did the Intermediate Court of Appeals, though the appellate court reasoned that the statute’s language required clarification by reference to a statutory definition.The Supreme Court of the State of Hawai‘i reviewed the case. It held that the statute was unambiguous and imposed two conditions for PIP coverage: the treatment must be appropriate, reasonable, and necessary, and it must be substantially comparable to the requirements for prepaid health care plans. The provider failed to satisfy the second condition. The Supreme Court affirmed the lower courts’ decisions. View "In re Request for Payment of Lawinski, v. Saiki" on Justia Law

Lambros J. Kutrubis held a life insurance policy, originally naming the trustee of his trust as the beneficiary. As his health declined, he sought to change the beneficiary to his ex-wife, Betty Stokes, and his adopted son, John Kutrubis. Lambros dictated and signed a letter requesting this change, with two witnesses and a notary present. At his instruction, a friend mailed the letter to the insurer, Banner Life Insurance Company. After Lambros’s death, Banner had no record of receiving the letter before his death. Betty and John claimed the proceeds based on the letter, while Eugenia Kamberos, Lambros’s sister and trustee of the trust, also claimed the funds. Banner initiated an interpleader action to determine the rightful recipient.The United States District Court for the Northern District of Illinois, Eastern Division, handled the interpleader. Betty and John moved for summary judgment, submitting affidavits supporting Lambros’s intent and actions. Eugenia responded with a brief but failed to file a proper response to their statement of facts as required by local rules. The district court deemed Betty and John’s facts admitted due to this noncompliance and granted summary judgment in their favor, finding that Lambros substantially complied with the policy’s beneficiary change procedures. Eugenia appealed, challenging the district court’s evidentiary decisions and the grant of summary judgment.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s judgment. The appellate court held that the district court acted within its discretion in deeming facts admitted due to Eugenia’s procedural noncompliance. It concluded that Lambros had substantially complied with the policy requirements to change the beneficiary, as evidenced by his clear intent and concrete steps. The court also found that, apart from the affidavit of an interested party (Betty), the admissible evidence sufficiently supported summary judgment in favor of Betty and John. View "Kamberos v. Kutrubis" on Justia Law

Between 2007 and 2011, Michael Jensen sexually abused multiple children in Martinsburg, West Virginia. Jensen’s parents and grandfather held significant positions within the Church of Jesus Christ of Latter-Day Saints. Several of Jensen’s victims later sued the Church in West Virginia state court, alleging that the Church failed to take reasonable precautions to prevent Jensen’s abuse, including failing to report suspected abuse and failing to supervise or warn families about Jensen’s prior conduct. Before a verdict was reached, the Church settled with the remaining minor plaintiffs and their families.Following settlement, the Church sought coverage from two of its insurers, National Union Fire Insurance Company of Pittsburgh, PA, and ACE Property and Casualty Insurance Company, for defense and settlement costs. Both insurers refused to pay, prompting the Church to file suit in the United States District Court for the District of Utah, claiming breach of contract and breach of the implied covenant of good faith. The central issue became whether the underlying events constituted a single “occurrence” or multiple “occurrences” under the insurance policies, which would determine if the Church’s settlements met the policies’ retained limits required for coverage. The district court granted summary judgment to the insurers, holding that each instance of abuse was a separate occurrence and, therefore, the retained limits were not met for any single occurrence.The United States Court of Appeals for the Tenth Circuit reviewed the case and reversed the district court’s grant of summary judgment. The Tenth Circuit held that the insurance policies’ definitions of “occurrence” were ambiguous and that the Church’s interpretation—that its alleged negligence constituted a single occurrence—was reasonable. Under Utah law, ambiguities in insurance contracts must be construed in favor of coverage. The case was remanded for further proceedings consistent with this interpretation. View "Church of Jesus Christ of Latter-Day Saints v. National Union Fire Insurance Company of Pittsburg" on Justia Law

A dispute arose between former colleagues at an investment firm, resulting in costly litigation. Plaintiffs, representing one side of the conflict, alleged that three excess insurers improperly allowed their rivals to pursue insurance claims for litigation expenses that should have benefited plaintiffs. The insurance tower comprised a primary policy and several excess policies, each requiring exhaustion of underlying coverage before attachment. Plaintiffs claimed they had submitted invoices for covered losses but had not received reimbursement from any excess insurer. They sought damages and declaratory relief regarding coverage and liability under the excess policies, as well as claims for breach of the implied covenant of good faith and fair dealing.The San Francisco City and County Superior Court determined that plaintiffs had sufficiently alleged exhaustion of the primary insurance policy but not of the excess layers. As a result, claims against the first excess insurer proceeded, while demurrers by two higher-layer excess insurers were sustained. The California Court of Appeal affirmed the dismissal, reasoning that plaintiffs had not alleged an actual controversy regarding coverage for the higher excess policies because exhaustion had not occurred. The appellate court also found the absence of exhaustion fatal to plaintiffs’ claims for tortious breach of the implied covenant of good faith and fair dealing.The Supreme Court of California reviewed the case and held that plaintiffs may pursue claims for declaratory relief and tortious breach of the implied covenant of good faith and fair dealing against excess insurers even if all underlying insurance has not been exhausted. It is sufficient at the pleading stage to allege facts showing that coverage under an excess policy will attach and that insurer misconduct has impaired recovery. The Court reversed the judgment of the Court of Appeal and remanded for further proceedings. View "Fox Paine & Co, LLC v. Twin City Fire Ins Co" on Justia Law